Is it same as it was last time?

Is it same as it was last time?

Last time when Nifty crossed 8000 levels we shared our views about overall market looks fairly valued and now heading towards overvalued region. From there it climbed to 8,800 levels and retreated back to around 8,200 level. Oil was trading around $100 per barrel and our rupee was trading around Rs 60 per dollar just few months ago.

Things are not same as it was earlier when market was trading in 8000 – 8300 levels as it is now. Rupee is trading at Rs 63 and oil is trading around $60 per barrel. The total market cap in the NSE market is Rs 8,198,352 crore and if we convert it in dollar terms then it is $ 1.30 trillion. Do you remember we just celebrated couple of months back our market cap breaching $ 1.50 trillion? Same time we were raising red flags (cautioned) as we were entering in the danger territory. Market at that time was around 8,800 levels.

The expected gross domestic production of India stands at $ 1.90 trillion. We did shared with you last year how we gauge overall market whether it is overpriced or under-priced (Click here). A drop of 5% in the market from here on will change the overall market from fairly valued to modestly undervalued region. So this time if market heads towards 8,000 again then it will be modestly at bargain price.

In saying that, we always advise to investors to invest in the quality stocks. But also it is important to buy them when they are trading at discount.

To win any investments in the equity you have to be on the right side of the transaction. Either you are right or wrong there is no other alternative. To keep your probability higher to win all the time you just need to think rationally and believe and be confident on your research. You always need to be ready to learn from your loosing bets. The early and quickly you learn, you will have an advantage on your competitors.

Let me share with you few of our winners, Amar Raja Battery, we hold this stock from last three and half years and we have made 540%. Axis bank, we hold this business from last two and half year and we made 200%, Mindtree we own from last two years and have made around 200% and Swaraj engine that we own from last one and half year and have made 100% returns.

We did had few losers like GMDC, where we could not figure out the demand and supply of the minerals and misjudged the forecast demand and its price. It was like a black swan moment for us. We did not lose much and learnt a lesson not to ignore market conditions and do our homework thoroughly before investing.

Remember that bull market just started in 2014 but most of our winners are giving good returns from almost last 3 years. It will be good to disclose that in our opinion all of those stocks are overpriced today.

We will get back to you in the New Year with our watch list of 25 businesses that we will be interested to invest or do more research with. Meanwhile Merry Christmas and happy Holidays from Valueoperations team and myself.